BMW prices will continue to rise through 2009

[Bernardo]

If you're in the market for a Bimmer, now is the time to buy. BMW is raising prices this year and next to help ease the burden of unfavorable exchange rates between European currencies and the weak U.S. dollar. CEO Norbert Reithofer told reporters that the company would also produce 20,000 to 25,000 fewer vehicles overall in 2009 and sell 40,000 fewer units in the U.S. Disastrous exchange rates aren't team Bimmer's only problem, either. The German automaker leases 60% (http://www.autoblog.com/2008/08/01/leases-hurting-luxury-automakers-bmw-wants-you-to-buy/) of its vehicles in the U.S. during a time when sinking residuals are losing automakers billions.

A quick look at July sales figures (http://www.autoblog.com/2008/08/01/by-the-numbers-july-2008/) shows that even the best-run automakers are hurting. Increasing prices twice within a year when people are cutting back likely isn't going to help matters much, but at least just about everybody (http://www.autoblog.com/2008/07/24/volkswagen-considering-price-hike/) else (http://www.autoblog.com/2008/07/16/hyundai-car-prices-set-to-rise/) is (http://www.autoblog.com/2008/06/27/toyota-considering-price-hikes-in-the-future/) doing (http://www.autoblog.com/2008/06/23/gm-launching-zero-percent-financing-sale-raises-prices-by-3-5-p/) it (http://www.autoblog.com/2008/06/15/show-them-the-money-chrysler-raises-08-prices-by-2/) too (http://www.autoblog.com/2008/07/29/ford-to-sharply-raise-lease-prices-on-trucks-and-suvs/).

Raising the prices will not help, the dollar will just keep getting weaker and weaker, till some point that if automakers decide to keep on rising the prices, none will be able to afford even the 3 series..there must be other solution.

[F250]

Raising the prices will not help, the dollar will just keep getting weaker and weaker, till some point that if automakers decide to keep on rising the prices, none will be able to afford even the 3 series..there must be other solution.

Where did you get your economics/business degree? The dollar's been getting stronger.:laugh:

Sinking residuals just might be a sign of the market's reaction to BMW's quality, Bangled styling and over-computerized It-Drives-You electronics.

For years, BMW advertised its high resale/residual values. Values that were propped up by ever increasing new car pricing.

In case you don't know, the guys at BMW, like many Germans are arrogant and inflexible. I visited BMW's Munich headquarters in 1987 as a VIP. During a tour led by senior management, I asked how BMW planned to compete against the upcoming Lexus and Infiniti V8 sedans. The reply was very telling:

"Ach, zoes are Japanese cars. Zey are not competition for us! Our zix zylinder straight zix is superior!"

Of course Lexus and to a lesser extent Infiniti spanked BMW's 7 series in the U.S. market forcing BMW to finally offer a 4.4 liter V8.

Expect BMW to adjust to market conditions in 5 to 7 years.:-D

[styla21]

Where did you get your economics/business degree? The dollar's been getting stronger.:laugh:

Which dollar are we talking about - Surely you aren't referring to the USD? :unsure:
E.g. USD vs. Euro - 2 year graph.
http://img257.imageshack.us/img257/3189/2ylx5.png

[RC45]

All I know is that the resale of Beemer and Benz's in the US has taken a crapper in the last 7 years for sure.

And if they raise the price of the new ones, it won't do anything except reduce sales.

[Pokiou]

Raising the prices will not help, the dollar will just keep getting weaker and weaker, till some point that if automakers decide to keep on rising the prices, none will be able to afford even the 3 series..there must be other solution.

One series!

[RC45]

One series!

If you are looking for a small car in the US it is most likely because you are on a budget - that eliminates the 1ers.

[Bernardo]

Its not only BMW that is raising prices, if you click on the links on my post you can see that also hyundai, VW, Ford, GM, and chrysler are also raising prices.I just used BMW as an example.

[pitfield]

Where did you get your economics/business degree? The dollar's been getting stronger.:laugh:

Sinking residuals just might be a sign of the market's reaction to BMW's quality, Bangled styling and over-computerized It-Drives-You electronics.

For years, BMW advertised its high resale/residual values. Values that were propped up by ever increasing new car pricing.

In case you don't know, the guys at BMW, like many Germans are arrogant and inflexible. I visited BMW's Munich headquarters in 1987 as a VIP. During a tour led by senior management, I asked how BMW planned to compete against the upcoming Lexus and Infiniti V8 sedans. The reply was very telling:

"Ach, zoes are Japanese cars. Zey are not competition for us! Our zix zylinder straight zix is superior!"

Of course Lexus and to a lesser extent Infiniti spanked BMW's 7 series in the U.S. market forcing BMW to finally offer a 4.4 liter V8.

Expect BMW to adjust to market conditions in 5 to 7 years.:-D

BMW offered a V8 7er years before Lexus was invented

[RC45]

BMW offered a V8 7er years before Lexus was invented

Really? Which V8 7 series was that?

[HeilSvenska]

BMW offered a V8 7er years before Lexus was invented
Lexus - 1989
BMW E32 7 Series with M60 V8 - 1992

[RC45]

Lexus - 1989
BMW E32 7 Series with M60 V8 - 1992

Awww... you took the fun out of the stick poking ;)

[HeilSvenska]

I am schure zat ze Chermanz vill appreschiate my kommittment to effischiency.

[RC45]

I am schure zat ze Chermanz vill appreschiate my kommittment to effischiency.

Sort of like a Trivial Pursuit Blitzkrieg... nice... I like it....

[5vz-fe]

From then, BMW start to realize that there's no replacement for displacement...3 series engine is getting larger and larger LOL.

[pitfield]

Whoops, I had thought that our old 730i had been the same since launch.

Although you could have a V8 S-Klasse from the W108, mid sixties.

[5vz-fe]

Yeah, Mercedes seems to know the high displacement theory better LOL. Still remember the good old 300SEL 6.3

[F250]

TAKE A LOOK AT THE RIGHT SIDE OF THE GRAPH. NOTICE THE DOWNWARD TREND. Do you honestly think the USD will stay at 1.56 Euros? I'd like to know what you base your opinion on.

Me? I recall my experience as a Money Market Trader (plus some experience with Foreign Exchange) at Manufacturers HanoverTrust (a top-ten New York bank years ago). Oh, yeah. I finished off my MBA from Loyola Marymount University by going to Europe and studying automobile manufacturers. Otherwise, my opinion is worthless.:ohmy:

Which dollar are we talking about - Surely you aren't referring to the USD? :unsure:
E.g. USD vs. Euro - 2 year graph.
http://img257.imageshack.us/img257/3189/2ylx5.png

[F250]

BMW offered a V8 7er years before Lexus was invented


Quit making this crap up! :crying: I was at the factory in Munich in 1987. No V8s anywhere except the museum.

BMW introduced a V8 in 1954 and built it through 1965. It powered the 501, 502, 503, 507 and 3200CS.

The next BMW V8 appeared in the 1991 840i.

The Lexus was launched in 1989. Infiniti came a few months later. Both companies were accused of dumping in the US market (selling below cost to gain market share).

[graywolf624]

The main reason for the increase in car prices right now is not exchange rate, but rather the price of raw materials. Primarily Steel comes to mind. IT wont last since steel prices will eventually drop, but how long will the rise last is a matter for speculation. For reference the Corvette C6 has increased in price nearly 3k since I bought last year.
Most major international companies have sizeable currency hedges which limit their exposure to the declining dollar. Furthermore, shortly the dollar will most likely begin to rise as people drive away from imports due to the cheaper domestic options.
Just to add my 2 cents..

Since we're giving qualifications: MBA specializing in Finance.. Economics minor specializing in public goods/resources. ;)